11:18     START TECH<00706> - Announcement & Resumption of Trading (5)        

    in accordance with Hong Kong GAAP) for the period                         
    commencing from the date of establishment to 31                           
    December 2004 is HK$920,000 (before taxation and                          
    extraordinary items) and HK$920,000 (after taxation                       
    and extraordinary items) respectively.                                    
                                                                              
    The unaudited deficiency in net assets of Wuhan                           
    Plastics (prepared in accordance with Hong Kong GAAP)                     
    as at 31 December 2004 is approximately HK$920,000.                       
                                                                              
    Chatex                                                                    
    Chatex is a company incorporated in the British                           
    Virgins Islands on 11 July 2001 with limited liability                    
    and acts as the investment holding company for the                        
    Group. Save for acting as the holding company of the                      
    Plastics Companies, Chatex has not commenced any                          
    business and does not own any material assets. Upon                       
    completion of the corporate reorganisation referred                       
    to above, the Group will transfer 100% interest in                        
    Chatex to Smart Eastern and the Group will cease to                       
    hold any interests in Chatex upon completion of the                       
    Equity Transfer Agreement.                                                
                                                                              
    REASONS FOR THE DISPOSAL                                                  
    The Group is principally engaged in (i) the provision                     
    of software development and systems integration                           
    services covering mainly healthcare security, social                      
    security, hospital information management systems                         
    and public security sectors and (ii) the sale of                          
    integrated circuits and computer software.                                
                                                                              
    The business of the manufacture and sale of computer                      
    related products is undertaken by the Plastics                            
    Companies. The increasing competition in the plastic                      
    injection processing market has resulted in a                             
    decrease of the gross profit margin of this business                      
    line of the Group. The Directors believe that the                         
    Disposal represents a good opportunity for the Group                      
    to dispose of this business line at a reasonable price,                   
    thus enabling the Group to streamline its costs and                       
    reallocate its resources to other business lines.                         
    After the Disposal, the Group will concentrate on its                     
    existing businesses including the provision of                            
    software development and systems integration                              
    services and sale of integrated circuits and computer                     
    software and the Group will also devote more resources                    
    to develop the business of provision of financial                         
    electronic payment services.                                              
                                                                              
    The Directors (including the independent                                  
    non-executive Directors) are of the view that the                         
    terms of the Equity Transfer Agreement are on normal                      
    commercial terms and are fair and reasonable and in                       
    the interests of the shareholders of the Company as                       
    a whole.                                                                  
                                                                              
    FINANCIAL EFFECT OF THE DISPOSAL                                          
    Prior to the completion of the Disposal, the Plastics                     
    Companies and Chatex are considered as subsidiaries                       
    of the Company and their financial results are                            
    consolidated with those of the Company.                                   
                                                                              
    After completion of the Disposal, the Company no                          
    longer holds any shareholding interest in the                             
    Plastics Companies and Chatex and therefore the                           
    Plastics Companies and Chatex will cease to be                            
    subsidiaries of the Company.                                              
                                                                              
    It is expected that the Group will record a book loss                     
    of HK$10,371,000 as a result of the Disposal which                        
    represents the difference between the